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V2670-20 24 August 2020 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · reserva de capitalización

Dividends from companies not part of a tax group are not eliminated when calculating the capitalisation reserve

A company has requested a ruling on whether dividends distributed by Company A in 2015 (prior to joining a new tax group) should be included when calculating the increase in equity for the new group in 2016. The DGT has ruled that, as the company was not part of the group in 2015, these dividends are not considered internal transactions and therefore are not eliminated.

The question raised

Whether dividends whose distribution was agreed upon by company A in the 2015 financial year, i.e., prior to the existence of the new tax group, and which are resulting in an increase in reserves within this group as of December 31, 2016, must be taken into account to calculate the increase in the equity of the tax group in the 2016 financial year, for the purposes of applying the reduction in the taxable base provided for in Article 25 of the Corporate Income Tax Law.

The DGT's ruling

To determine the increase in the equity of the tax group in 2016, the difference in the equity of the entities comprising said group in that financial year must be considered. Since the taxpayer was not part of company A's group in 2015, the dividends distributed by the latter are not considered internal dividends subject to elimination. Therefore, if the taxpayer's result in 2015 was positive and is allocated to reserves in 2016, it may represent a higher amount of equity without the need to perform an elimination.

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